Category: Tips for Buyers
Negotiating a real estate deal can be fraught with issues in large part because everyone’s risk tolerance is different. Buyers and sellers often believe it is a win/lose proposition. Automatically assuming the other party is an adversary does not create the proper framework for compromise and deal making. And, even after the initial deal has been made, when something else goes south along the way, being adversaries will make those additional negotiations more difficult to work out. As a Certified Negotiation Expert* (CNE®) I have learned specific techniques to ensure that transactions become win/win opportunities. I find that thinking carefully about wants, needs, and desires can change how a negotiation comes together where risk and rewards are shared by all parties.
These are some of the questions I ask myself as I embark on a negotiation.
Why is it in their self-interest to do what I want them to do? What are their self-interests? Regardless of whether I am representing the buyer or the seller, seeing the situation from the other side’s point of view is important. Asking open-ended questions is a great way to obtain additional information on motivations I may not have considered.
How is my client’s offer unique? An offer is so much more than the dollar amount. Contracts have lots of variables that can sway the equation. I always ask “what in addition to the right price will influence your decision to accept the agreement?” Often, the closing date is very important to either side. Buying or selling a home can be stressful enough without additional complications for moving day.
How does my response compare so my offer looks best? For example, one thing I always look for is if the lender is local. It may seem like a small thing, however I have had numerous complications with lenders who don’t know and understand the particulars of the Lowcountry market. In North Carolina, the appraisal is done prior to the home inspection, while here, it is typically the opposite. One lender from another state told my seller she did not need to have a termite inspection because it was not a VA loan. I have dealt with multiple time zone issues and finally closed a 4pm closing at 8pm that evening. The loan officer was based in Utah but the funding was coming from Texas.
What can we trade or exchange of equal value? When parties are close, sometimes throwing in appliances that originally would not have conveyed or some patio furniture can do the trick. First-time homebuyers may be using most of their savings for the down payment. By making a full-price offer and asking for a contribution toward closing costs instead, sellers can net a comparable amount while raising the mortgage for the buyers by comparatively little.
What evidence or logic makes sense for them to agree with me? I prefer to make my own arguments and leave no doubt about my client’s intentions. Negotiation partners may still make assumptions on their own to be sure, but agents also sometimes negotiate harder with their clients than they do with the other party. I give them my ammunition to make my case for me.
*Fewer than 1% of real estate agents hold this designation across the country.
Anyone who knows me knows I have a thing for shoes. I’m attracted to unusual colors, patterns, and I love a high heel. I fell in love with a turquoise, black, salmon and white slingback from Nine West called Confetti and bought 3 pair so when one pair wore out, I would still have another waiting in the wings. But what does that have to do with buying or selling a house?
First, I had to think creatively about the outfits with which they might work. Like real estate, I found it did not have to be a perfect match. I am pleasantly surprised that they go with so many things. I have an orange outfit that the shoes work well with because they appear more orange than they do when I wear them with rose colored pants. Your perfect house may not be an exact match for your preliminary requirements, but keep an open mind and you might be surprised. One client said she absolutely needed a separate laundry room, but in the end decided having it in a closet on the second floor actually worked out better with her small children’s numerous laundry stacks.
I would rather shop for shoes than anything else because, you get to sit down and you don’t have to take your clothes off. And hey, you have to try them on. Shopping for your next home is like that. You have to try them on. Feel how bright and light the kitchen is. Photos frequently don’t tell the whole story. I sold a beige/taupe colored house that appeared pinkish in the photos. My clients weren’t sure about the color until they saw it themselves and decided it was fine. They actually liked how it contrasted with the large green trees on the property.
For me, the thing about shoes is, that I want to fall in love with them. A plain black pump will never do when there are cut-outs, trim, fringe and zippers to be had. I want something special. It’s important to me that I hear my clients say they “love” a home before we make an offer. When I hear that magic word, I know I have done my job. It’s a big commitment and with the Charleston real estate market so hot recently, it’s important to make quick decisions when you love something because hot properties get snapped up quickly.
Finally, how do they make you feel. When I try on shoes I want to feel like dancing or even better, do they make me feel taller and thinner! My rose gold sandals with the laser cut design make me feel like I could show houses all day. If there is anything I know about the home buying experience, it’s that purchasing real estate is always an emotional decision.
Even the most pragmatic clients can find the process emotional because of all the moving parts of a transaction, the ever-present potential for road bumps along the way, and the lack of direct control of certain elements. When these issues inevitably come up, it’s important to be able to de-stress by focusing on how the new home makes you feel. Call me, and I’ll help you navigate the process and help you stay in touch with your emotional connections.
Zestimate®. It has “estimate” right in its name and yet it can be very problematic for both buyers and sellers alike. Sellers are frustrated when the selling price located right above the Zestimate® appears to be overpriced and hurts their cause. On the other hand, sellers often sit down with me at a listing appointment and have unreasonable expectations for what they can realize in the sale of their home because the Zestimate® is too high. Buyers are disappointed when they realize the home they just fell in love with online, is not going to be purchased for the Zestimate® price. Zillow® has in fact, offered a prize to anyone who can rewrite their program to become more accurate. They have also been sued for conducting appraisals without a license.
There are several reasons this “one size fits all” product is not always accurate. Sure, they have complicated algorithms that look at square footage, bedrooms and zip codes but there are too many other elements that cannot be factored into determining value. My home for example, is on Johns Island in a small neighborhood with 15 homes built in 2005-2006. Zillow® will aggregate my home with the mobile homes nearby and a horse farm down the road to determine the value. Just because these homes are nearby, does not mean they are comparable. Even if you can narrow down to similar homes in a large subdivision, often times there are phases in those subdivisions that can account for differences in quality and materials.
In Charleston, views greatly affect the home’s value. The differences between marshfront, marshview, waterview, riverview, oceanview, and oceanfront are unique and sometimes subtle. Likewise, my Johns Island home faces the other homes that are similar in quality to mine, but five of the homes in our subdivision face across the street from the mobile homes. That type of view can also affect value.
Perhaps the most important reason to use a qualified Realtor® is to assess condition. Zillow® cannot see inside your home to see your upgraded kitchen and beautiful tiled bath. Likewise, it cannot see into your neighbor’s house to see that baseboards are missing, door handles are broken, and windows have not been maintained. A home with lots of dated wallpaper and worn finishes is treated the same as a newer and more updated one. My neighbor’s property has beautiful, big Live Oaks and mine does not. Even a qualified appraiser might have trouble assessing the inherent value of the trees. There are also many things only someone who knows the area and is informed about the community can bring to the table as well. Did that neighborhood experience flooding during the recent hurricane, is there a new school being built nearby, or even what new zoning might be coming from the local municipality. A good real estate agent stays up to date on local news and events. In addition, an experienced agent will know what questions to ask homeowners such as traffic patterns, proximity to local businesses and if high tide ever makes travel problematic.
Condition of the exterior, interior and neighborhood all influence value. As an experienced Realtor®, I can also tell you that Zillow® will not be able to determine if the home you just loved on line smells like cat pee in person!
Call me and I will come to your home to conduct a free Comparative Market Report to find out what your home might be worth.
Consider these situations…
A couple who had just one rule when we started looking – no flood insurance – bought a charming house on a lagoon.
I helped a single guy who wanted a fixer upper out in the country with acreage who ended up buying a new construction townhome in West Ashley. He loves it.
My clients who absolutely wanted a water view ended up looking at a carriage house on Rutledge that looks down a narrow driveway with a view of the other side of the street.
Another client, with plans to move to Chapel Hill, sold his home in West Ashley and purchased a townhouse in Mt. Pleasant instead.
My point is that sometimes things change and it’s important to be receptive to suggestions that might be outside the box. Seeing property online using search criteria is immensely efficient, but charm of place or sense of spaciousness can be misleading. Working with an experienced agent can often bridge what seems like an insurmountable gap.
It can also sometimes be difficult to understand a neighborhood until you are there to experience it, and help change minds in the process. People who are unfamiliar with an area may have preconceived ideas about neighborhoods they have never explored. Realtors often know about hidden gems and unique opportunities. Before ruling out a home that is close to a busy road on a map, you might find that it is positioned perfectly to reduce sound if the garage serves as a buffer on the side with traffic. Getting inside the home can also tell you if you hear road noise or not.
There are just some things that must be seen in person. When showing a home, I will point out where there is evidence that it has been well-maintained. I look for loose baseboards and trim. If these have been neglected, it makes me wonder what other systems and day-to-day repairs have been ignored. In addition to trim and minor repairs, I always look at the return vents and heating and air conditioning vents.
If these are dirty (and it won’t likely show up in photos) it tells me that the owners have not taken care to replace filters regularly or have the HVAC serviced and maintained. That can be a big-ticket item down the road. These are the kinds of things that might make a “perfect” house on paper, less than perfect.
While it is important to prioritize needs and wishes, never say never, especially in the diverse and ever-changing Charleston real estate market.
By now, most people know what it means to “buy local.” In Charleston for instance, it’s known that buying local seafood ensures the upmost freshness, and similarly by supporting local book stores, your dollars circulate in the community. But what difference does it make in real estate transactions? In my experience, the local providers make transactions go more smoothly every step along the way.
You might ask “what difference does it make if I use some nationally known lender that I can access online versus a local lender?” The convenience of logging on at 10:00 pm and typing in information might seem like an easier option than meeting face to face, or even scheduling a call with a local lender. In the long run however, the convenience on the front end might turn out to be less convenient once the process begins in earnest. One out of state lender told my client that she did not need a CL-100 (letter indicating no termites or damage) and she nearly cancelled the appointment to inspect. This lack of knowledge about the specifics of SC real estate transactions can create speed bumps when closing a deal, and even the difference in time zones have caused problems with closing on time. Most importantly, I find local lenders also understand the pricing in this market better than national companies and tend to approve loans for higher price point because they know the market will support it.
Living in the Lowcountry means risks and hazards that may be unfamiliar in other areas of the country. An insurance provider based in Kansas may not be aware of our flood insurance risks, wind and hail issues, and even earthquakes here. For example, there was a tremor in Summerville in June, and they happen regularly. Local agents know this, and can advise you accordingly.
Appraising real property is not an exact science. It takes judgement, discernment and experience. The difference between Folly Beach and Johns Island is not just 15 miles of travel. It can be the difference between a quirky beach house and a horse farm – with the same price tag. Appraisers may be well-qualified in Columbia to make a judgement about different kinds of property, but may be geographically incompetent here. Appraising homes in a subdivision in a more homogeneous area is also a different challenge than the many diverse types of homes and lifestyles here in the Charleston market.
So often I work with clients who are getting advice from a family member or friend who is a real estate agent in another part of the country, or even this state. It’s only natural to seek that advice from family members who only have their best interests in mind, to help them make a big decision. More often than not, that advice does not apply in this particular market. The market in New Jersey is very different than Mt. Pleasant. An experienced, local Realtor® knows that a well-priced home in Riverland Terrace is not going to last long, and offering 20% below asking price will not get the job done. I’ve had more than one client lose an opportunity because of advice they received that does not apply to this unique market with its many equally unique sub-markets. Similarly, in North Carolina, it is customary to have the appraisal done before the home inspection, where here it is the opposite. My clients who moved to Iowa, learned that finished space that is heated and cooled but in the basement is not counted in the total square footage. We don’t have basements for the most part, but here all heated and cooled space is counted.
There are so many things that can affect real estate transactions on all fronts, and working with local experts can make all the difference in getting to closing.
For quite some time, Mount Pleasant, SC has been the fastest growing town in the Charleston area. Our agents are often asked if it’s still possible for first time home buyers to find affordable housing in a community so in demand. And the answer is – of course! – but you have to know where to look. While the days of abundant fixer uppers and “handyman specials” in Mount Pleasant’s well established neighborhoods have come and gone, you can still occasionally find a home in need of some love. However, for the widest variety of results in the under 300K category, you’ll need to look at condos and townhomes. For now, there is a nice variety of 1-3 bedroom / 1-3 bath attached homes in the under 300K price range, but with the way this town is booming, who knows for how long?
After a quick search of the area and price range, we’re featuring two properties in a great neighborhood: Etiwan Pointe
241 Etiwan Pointe Drive
Like most townhome communities, Etiwan Pointe’s monthly HOA includes ALL exterior maintenance, insurance, and lawn care. The neighborhood also features amenities like a pool and fitness center, but what truly sets it apart from the other condos and townhomes in this price range is the deep water community dock. Access to the Lowcountry’s waterways is a HUGE perk! Winding Rathall Creek leads directly to the Wando River and is perfect for kayaking, paddleboarding, fishing, or enjoying the sunset . Bonus: the home at 241 Etiwan Pointe Drive is currently the lowest priced in the neighborhood and boasts abundant sunlight and marsh views from the screened in porch and master bedroom.
116 Summers Creek Court 109-1
Etiwan Pointe is within biking distance of Westbrook Brewery, Long Point Grill, and is extremely close to the Kearns Park Trail, which meanders through a maritime forest along the Wando River and offers stunning views of the harbor, bridges, and marshes. You walk right out the door of116 Summer Creek to the community pool across the street. This home features two porches – one screened in off of the living room and the other located next to the dining room to expand your entertaining space with the opening of French doors. Bonus: the price was recently reduced!
It doesn’t matter whether you are a Lowcountry native or you just fell in love with Charleston like I did, with more than 5,000 real estate agents in the Charleston market, you might ask how should I choose an agent to help me purchase wisely and find someone who will look after my interests?
Hire a career professional
There are not more than 5,000 agents making a living as a professional real estate agent. Many, work part or full-time at other professions, some work part-time by choice, and still others have a license just to represent friends and relatives. There is however, no substitute for a full-time, experienced agent who has seen many potential pitfalls and can recognize great opportunities when they arise. Additionally, there are many details to be addressed in any real estate transaction, and having someone whose only job is to see your purchase through to completion is critical.
Hire someone to protect your interests
New construction buyers are frequently not educated about their own consumer protection. They arrive at a model home to be greeted by a friendly site agent. It’s important to remember that as nice and professional as those agents may be, they are not primarily focused on protecting the buyers’ interests but rather on the interests of the company that pays their salary. Make sure you have someone on your side who understands the details of the contract you will sign and can manage the details and deadlines along the way to protect you financially. Remember, the seller pays your buyer agent’s fees so hiring an agent costs you nothing and protects you on everything.
Hire an expert
Everyone “knows someone” in real estate (especially here in the Lowcountry) and whether it’s a friend or relative, think about how that relationship might be affected when issues inevitably arise. Would you rather have that conversation with a person who can be neutral and objective, or find yourself in conflict with issues unrelated to the matter at hand? Consider the benefits to the friendship by hiring an expert – after all, it is a business decision.
Hire a Realtor®
As Phil Dunphy on Modern Family has said, he’s not just a real estate agent, he’s a Realtor®. A Realtor® is held to a stricter code of ethics than real estate agents. Having confidence in your agent’s ethics and knowledge of best practices will help you sleep at night. Realtors® are members of a national organization and are required to take additional continuing education courses to insure they are up to date on the most current laws and the best practices. Make sure you select a Realtor® to insure you receive the best possible representation.
Hire a CNE®
Only a small percentage of agents throughout the country are Certified Negotiation Experts. Advanced, continuing education is required to achieve the CNE® designation. I recently interviewed agents in Chapel Hill, NC for clients who were moving there from Charleston. I did so because they had a bad experience with an agent in Asheville, NC while looking for a vacation home. After talking with three Realtors ® with this particular designation, I referred two of them to my clients. They went with my first choice and have been delighted with the outcome and closed on a new home last week. When interviewing agents ask if he or she is a Certified Negotiation Expert. It can be a huge asset to have someone on your side that is more effective in using a variety of techniques to achieve your best outcome.
– Terry Bell-Aby, Realtor®, CNE®
Tax Credits for Historic Properties
People from all over the world love Charleston and its wonderful architecture. Our leaders years ago, knew that preserving that charm would be important to its future. What might seem to some like draconian rules that must be followed have become the unswerving guiding principles to preserving these beloved historic structures. Consequently, incentives have been put in place to encourage owners to “do it the right way” and truly restore and not just remodel historic buildings.
How does it work?
Taxpayers who rehabilitate their owner-occupied residence may be eligible to subtract 25% of the costs of many expensive repairs and renovations from their state income taxes.
How do I qualify?
Your building must meet both of these criteria:
1. You must own and live in the building or a portion of the building that will be rehabilitated. It can be a house or another type of historic building, such as a school or store, that you are rehabilitating to live in. An historic outbuilding associated with your residence, such as a barn or a garage, can also be eligible for the credit. The credit does not apply to buildings or portions of buildings that are used in a trade or business or produce income.
2. Your building must be one of the following:
• listed individually in the National Register of Historic Places
• contributing to a listed National Register historic district
• determined by the State Historic Preservation Office (SHPO) to be eligible for individual listing in the National Register
• an outbuilding that contributes to the significance of a property listed in the National Register
One might be surprised to learn that tax credits are available all around the Lowcountry and not just downtown Charleston that qualify. Here are a few: Historic District (HD) in Summerville, Hampton Park Terrace, a carriage house downtown, a Freedman’s cottage in North Central, Mt. Pleasant HD, Ashley River HD Atlanticville HD Charleston Navy Yard Officer’s quarters HD, French Quarter HD, Moultrieville HD, Pinopolis HD, Pineville HD, Sullivan’s Island HD, Successionville HD to name a few.
What elements qualify?
Money spent in the following categories may be counted as “Rehabilitation Expenses” when calculating the amount of credit:
• restoration of historic plaster
• energy efficiency measures except insulation in frame walls
• repairs or installation of heating, air conditioning, or ventilating systems
• repairs or installation of electrical or plumbing systems exclusive of new electrical appliances and electrical or plumbing fixtures
• architectural and engineering fees.
Allowable expenses do not include the cost of new construction beyond the footprint or volume of the existing building, the cost of acquiring or marketing the property, the value of an owner’s personal labor, or the cost of personal property.
Are there other requirements?
You must spend more than $15,000 within 36 months on Rehabilitation Expenses that qualify. Remember, this is a government program. There will be forms to complete, timelines, reviews, and copious documentation is required.
What is the most important take away?
Do not start any work until the first form is approved by the state of SC. You must have documentation of every element you intend to claim with before and after photos. You must tract specific expenses scrupulously throughout the process and you must quantify all work. This is not easy and contractors don’t like doing it so you will likely be the project manager for the tax credit work. But remember, it pays well come April 15th.
With an interest rate increase still in the cards this year, combined with the American political landscape and global economic events, a cooldown could occur by winter. Presently, however, summery growth prevails as many locales are reaching near-record prices not seen in more than a decade.- According to Charleston Trident Association of Realtors
Market Stats through May 2016
REGIONAL REAL ESTATE SALES
CHARLESTON, SC—(December 10, 2015) 1,029 homes sold in November in the region at a median price of $246,000 according to preliminary data released today by the Charleston Trident Association of Realtors® (CTAR). In November 2014, 987 homes sold at a median price of $222,067.
Year-to-date data shows that sales volume is 14% ahead of where it was last year, with 14,758 sales through November 2015 and the regional median price has increased by 5.3%, currently $228,000. Through November 2014, 12,933 homes had sold at a median price of $216,352.
- Upper Charleston Peninsula
- Downtown Charleston
- Mount Pleasant (below IOP connector)
- Mount Pleasant (above IOP connector)
- Folly Beach
- Isle of Palms and Wild Dunes
- Sullivans Island
- Kiawah Island
- Seabrook Islands
- Daniel Island